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Key Highlights
- Zomato will be valued at $7.6 billion (nearly Rs 56,240 crore), more than Amazon-backed British food delivery firm Deliveroo or Nasdaq-listed Grubhub.
- The offer will be a mix of fresh issue (worth Rs 9,000 crore) and and offer for sale (worth Rs 375 crore) from Info Edge
- Earlier Info Edge was planning to offload shares worth Rs 750 crore through the OFS but later it changed its plans
New Delhi: The initial public offer (IPO) of online food delivery and restaurant discovery platform Zomato, which got a green signal from the market regulator last week, is likely to open for subscription on July 19 and may continue for three days till July 22 (July 21 holiday), the Economic Times mentioned in a report. The issue may be priced in a band of Rs 70-72 per share, the financial daily mentioned citing people with direct knowledge of the matter.
At this price band, the offer size will likely be as much as Rs 9,375 crore, making it the second-biggest IPO in the last four years after the Rs 10,355 crore offer from SBI Cards and Payment Services. In October 2017, General Insurance Corporation of India had raised Rs 11,176 crore through an IPO.
Worth mentioning here is that at the upper end of the price band, Zomato will be valued at $7.6 billion (nearly Rs 56,240 crore), more than Amazon-backed British food delivery firm Deliveroo or Nasdaq-listed Grubhub.
“The Zomato issue is planned for July 19 to 22 as the market is closed on July 21 for Bakrid,” the publication quoted one of the persons as saying. The offer will be a mix of fresh issue (worth Rs 9,000 crore) and and offer for sale (worth Rs 375 crore) from Info Edge, one of the company’s largest shareholders.
Earlier Info Edge was planning to offload shares worth Rs 750 crore through the OFS but on Sunday, the company told stock exchanges that it would reduce the offer for sale in the Zomato IPO by about half to Rs 375 crore.
At present, Info Edge is the biggest shareholder in the company with around 18.5% stake, which it acquired at an average cost of Rs 1.16 per share, according to the draft red herring prospectus (DRHP).
Other shareholders of Zomato include Uber (9.13%), Alipay Singapore (8.33%), Antfin Singapore (8.2%), Internet Fund (6%), SCI Growth Investments (6%) and cofounder Deepinder Goyal (5.51%).
According to the ET report, in the unofficial market for unlisted shares, the stock is trading at Rs 78-80 apiece, around 12% above the projected IPO price of Rs 70-72. In the latest round of funding, Zomato sold shares at Rs 55-60, for a valuation of Rs 40,000 crore.
Out of the IPO proceeds, the company plans to use Rs 5,625 crore toward funding organic and inorganic growth initiatives.
In FY20, Zomato reported a revenue of Rs 2,743 crore, a 463% jump from FY18 revenue of Rs 487 crore. Its revenue, in the nine months ended December 31, 2020, stood at Rs 1,368 crore. The company said it has incurred losses of Rs 106.9 crore, Rs 1,010 crore, Rs 2,385.6 crore and Rs 682 crore in FY18, FY19, FY20 and the nine months ended December 31, 2020, respectively.
